Texas Education Freedom Accounts Begin Funding Students

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Texas’s new Education Freedom Account (TEFA) program reached a major milestone on July 1 as nearly 73,000 participating students began receiving their first round of funding.

The announcement by Acting Texas Comptroller Kelly Hancock (R) marks the official transition from legislative debate to program implementation. After months of applications, lottery selections, waitlist announcements, and enrollment confirmations, thousands of Texas families are now beginning to use the state’s new school choice program.

The rollout also represents the next chapter in what has become one of the most significant education policy changes enacted during the 89th Texas Legislature.

Texas Education Freedom Accounts Move From Policy to Practice

According to the Texas Comptroller’s Office, nearly 73,000 students are receiving initial funding through the TEFA program beginning July 1. State officials describe the initiative as the nation’s largest first-year school choice program.

Students participating through homeschooling or other eligible nonpublic educational settings receive their entire $2,000 annual award immediately.

Students attending participating private schools receive funding in installments. Twenty-five percent of their annual award is distributed on July 1, another twenty-five percent will be released on October 1, and the remaining fifty percent will be distributed on February 1, 2027, provided the student remains enrolled at a participating private school.

This phased funding structure is designed to verify continued enrollment before the full annual award is distributed.

Families Still Face Important Texas School Choice Deadlines

Although funding has officially begun, several important enrollment deadlines remain.

Families awarded Education Freedom Accounts before June 22 have until July 15 to select a participating private school. Those schools must then verify student enrollment through the TEFA portal no later than July 31.

Families selected from the waitlist later this summer will receive four weeks from the date of their award notification to complete those same requirements before funding is released. Additional awards are expected to continue in batches before the beginning of the 2026 through 2027 school year.

These deadlines represent the final administrative steps before many participating students begin using their Education Freedom Accounts.

The TEFA Marketplace Officially Opens

Another major milestone accompanying the July 1 rollout is the opening of the TEFA Marketplace, the online platform through which participating families must spend Education Freedom Account funds.

Rather than reimbursing educational expenses after purchases are made, families must purchase approved educational products and services directly through the secure marketplace. Eligible expenses include private school tuition, textbooks, instructional materials, tutoring services, educational technology, educational therapies, transportation, and other approved educational products and services.

At launch, the marketplace includes more than 54,000 approved educational products and services from nearly 2,400 participating vendors. State officials indicate additional vendors and educational offerings will continue to be added over time.

Multiple Layers of Oversight Aim to Protect Taxpayer Dollars

The Comptroller’s Office also emphasized the accountability measures built into the program.

Education Freedom Account funds may only be spent through the TEFA Marketplace and cannot be used for reimbursement of purchases made elsewhere.

In addition, the program will undergo oversight through three separate review processes. The Texas Comptroller’s Office will conduct internal oversight, an independent auditing firm will review program operations, and the Texas State Auditor’s Office will provide an additional layer of accountability.

These safeguards reflect lawmakers’ efforts to ensure taxpayer dollars are used only for approved educational purposes while maintaining public confidence in the program.

Demand for School Choice Continues to Exceed Available Funding

The beginning of funding distributions also serves as a reminder of the tremendous demand for educational choice across Texas.

Earlier this year, more than 274,000 applications were submitted for the inaugural year of the Education Freedom Account program. Although additional students have been moved from the waitlist through multiple rounds of awards, demand continues to substantially exceed available funding.

The continued movement of students off the waitlist demonstrates that implementation remains an ongoing process rather than a single funding event. As additional funding becomes available, more Texas families may receive opportunities to participate before the school year begins.

The first year of implementation will also provide policymakers with valuable information regarding participation rates, marketplace utilization, program administration, and future funding needs.

The Case for Universal School Choice

The successful implementation of the Education Freedom Account program does not change Texas Policy Research’s (TPR) longstanding position on the legislation that created it.

During the 89th Legislature, TPR opposed Senate Bill 2 (SB 2), not because of opposition to educational freedom, but because the legislation established what the organization viewed as a bifurcated education funding system rather than a truly universal school choice model. The legislation created the Education Freedom Account program while preserving and expanding the existing public education funding structure, rather than allowing education funding to consistently follow individual students.

Texas Policy Research argued throughout the legislative process that meaningful school choice reform should place students, rather than educational institutions, at the center of Texas’ education finance system. While Education Freedom Accounts expand opportunities for participating families, the organization expressed concern that the enacted program continues increasing funding for the traditional public education monopoly regardless of whether individual students remain enrolled there.

As a result, Texas now operates two parallel education funding systems. One funds students who participate in Education Freedom Accounts, while the other continues largely insulating traditional public school funding from enrollment changes. Texas Policy Research has consistently argued that lasting reform should instead create a single student-centered funding model where education dollars follow children regardless of where they receive their education.

That philosophy remains one of the organization’s legislative priorities through the Texas Liberty Compact.

The Texas Liberty Compact calls for enabling truly universal school choice, advocating for universal eligibility without arbitrary funding caps, funding formulas that allow education dollars to follow students directly, minimizing unnecessary administrative bureaucracy, and avoiding reforms that preserve monopoly funding while creating separate school choice programs.

From that perspective, the Education Freedom Account program represents meaningful progress toward educational freedom, but not the completion of reform. The extraordinary demand demonstrated during the program’s inaugural year suggests many more Texas families are seeking educational opportunities than current funding levels permit.

Looking Ahead

With funding now reaching participating families, attention will increasingly shift from legislative debate to program performance.

Lawmakers will likely monitor marketplace participation, administrative efficiency, financial accountability, student outcomes, and continued demand as the first year of implementation unfolds. Those findings will almost certainly shape future legislative discussions regarding whether Texas should expand funding, modify eligibility requirements, or move toward a more comprehensive system of educational choice.

The launch of Texas Education Freedom Accounts marks a significant milestone for educational choice in Texas. Nearly 73,000 students are now participating in a program that did not exist just months ago, and the first year of implementation will provide lawmakers with valuable data on participation, accountability, and educational outcomes.

At the same time, the overwhelming number of applications compared to available funding reinforces what has become clear throughout implementation. Texas families continue seeking greater educational flexibility than the current system can provide.

For Texas Policy Research, that reinforces a position held throughout the debate over Senate Bill 2. Expanding educational freedom is an important step, but lasting reform requires moving beyond a bifurcated funding structure toward a truly universal school choice system where education funding follows students rather than institutions. Such a model would better align educational funding with parental choice, strengthen accountability through competition, and fully realize the promise of universal school choice in Texas.

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